#6 - Cummins (NYSE:CMI)
The last company on our list is involved in hydrolysis. Cummins (NYSE: CMI) is one of just two companies that manufacture large-scale hydrolysis equipment. Hydrogen generation will not be commercially viable for quite some time. But that could be changing.
The DOE’s Fuel Cell Technology Office (FCTO) recently set aside $64 million for hydrogen research. The plan is to bring down the cost of hydrogen generation so that it can better compete with natural gas (the current source of hydrogen). The DOE press release says, "This investment will support transformational research and development (R&D), innovative hydrogen concepts that will encourage market expansion and increase the scale of hydrogen production, storage, transport, and use."
After dipping over 40% at the outset of the Covid-19 pandemic, shares of Cummins have rallied and are essentially flat for the year as of this writing. In June, Citigroup (NYSE: C) raised its price target on the stock to $192.
About Cummins
Cummins Inc designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera. The company offers diesel and natural gas-powered engines under the Cummins and other customer brands for the heavy and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets; and offers parts and services, as well as remanufactured parts and engines.
Read More - Current Price
- $351.38
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $356.92 (1.6% Upside)
I wouldn’t blame you if you were skeptical about Nikola. Nikola is not the first company to enter the alternative fuel auto market with more hype than hope.
The company has yet to produce a product of any sort, let alone something as ambitious as a hydrogen fuel cell truck. And developing the infrastructure to support the company’s ambitions will not be easy or cheap.
However, investing is about being in the right place at the right time. And Nikola may be ready to deliver on the promise of the hydrogen fuel cell market. One reason for that is because Nikola is focusing on trucks that run defined routes. This allows Nikola to plan their hydrogen fueling stations at optimal locations to ensure they will deliver the largest benefit.
Just as Nikola may be years away from delivering on its promise, these companies may not be a home run overnight. Nikola has given these companies valuable exposure now. It’s up to them to capitalize.
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